Category Archives: Bitcoin

The Bitcoin network and price has been heavily influenced by Bitcoin Cash (BCash) and SegWit activation over the past few weeks. It is no coincidence that BCash was launched to directly compete in this manner.

The market has been struggling to continue to price in SegWit, a protocol improvement that lends itself to better network efficiency, and BCash, an attempt at direct competition to Bitcoin. This hypothesis can be evaluated by comparing various network metrics of both Bitcoin and BCash.

Prior to SegWit activation, BCash rose greatly in price. The increase was driven both from a technical basis of selling volume exhaustion, and likely a concerted effort to pump the price to increase mining profitability.

By doing so, miners who are coin agnostic moved their hash rate to BCash network for a better return. This activity may have also represented a specific mining pool or group of mining pools with an interest in the health of BCash.

In the meantime, transactions fees being paid to miners on the Bitcoin network are currently extremely high. BCash was created due to this very reason.

However, this may represent a ripple effect of network stabilization from the drop in hashrate creating a backlog in transactions. Although the backlog has been worse in the past with fees not as high, this was when Bitcoin was at a lower price.

The previous all time fee high was around the same time of a large temporary decrease in Bitcoin hash rate, before a difficulty adjustment occurred. This meant that average block confirmation times increased greatly, to above 16 minutes, and total possible transactions on the network decreased.

But hash rate has since rebounded, which should stabilize the network. Block size remains below the 1MB ceiling, which should be broken soon as SegWit is now active. This will in turn lower fees in the near term, making mining the chain less profitable.

The most basic analysis focuses on finding zones which are ranging versus zones with price action. Ranging zones can be thought of as zones of support or resistance, sometimes called orderblocks. There are buyers and sellers ready to jump into the market should it reach that zone again.

The recent increase occurred $200 above the previous orderblock, indicating the strength and momentum of the existing trend. Should a pullback occur, expect a stab into the ~$3150-$3470 orderblock.

Adding Fibonacci extensions, you can also estimate suggested support or resistance at the 1.618 fib, after measuring the extreme high and low of previous price action. Based on the two previous zones, there is fib resistance between ~$4800-$5000 on the next leg up. Expect the $5000 psychological barrier to hold, or a strong retrace from that level. Beyond the $5000 barrier, fib extensions suggest ~$5600-$5800 as the next pitstop.

Whenever the health of a trend is threatened, its important to fall back on what you know, so you are not driven by emotions, but rather, a tested and proven system. My favorite indicator for diagnosing the health of a trend is the Ichimoku Cloud.

The Cloud system is a constant, auto-drawn indicator which quickly offers an immense amount of valuable information on any time frame. The Cloud is best used at higher time frames as more data generally provides more accurate signals and less false positives.

The indicator uses moving averages and dynamic support and resistance to make projections of key zones, as well as capturing 80% of any given trend. As long as the price remains above the Cloud, sentiment remains bullish. Price in the Cloud indicates a neutral trend, and below the Cloud indicates a bearish trend.

When the Tenkan (T) is over the Kijun (K) sentiment is bullish. K over T would indicate bearish sentiment. When the Lagging Span (LS) is above the Cloud and above the price sentiment is bullish, below the Cloud and price would indicate bearish sentiment.

On the daily timeframe, despite the distance from price to the Kijun, which signals heavily overbought conditions, a Kijun bounce has yet to occur. There was a perfect Tenkan bounce, which traditionally signals strong continuation, ie, the trend is so strong, mean reversion cannot even occur. It is important to consider price as overbought despite an attempt at an ATH test. The Kijun remains a valid pullback target if/when that should occur.

On the four hour time frame, there was a bearish TK cross above cloud, a long exit signal (red arrow below). This assumes you were not already stopped out using other indicators, such as Heikin-Ashi candlesticks or Bill Williams fractals. Additionally, there was a short entry signal when price closed inside the cloud. I refer to this as an edge-to-edge trade. The target for these trades is always the opposite end of the cloud, which can be thought of as the next rung of support.

This target zone was essentially hit, and price bounced quickly. As with any support or target, its important to place entries or exits +/- a few dollars from the target for this exact reason. Currently, there is no indication to re-enter a long based on the four hour time frame, as there has not yet been a bullish TK cross (green arrow).

If getting out and back in a trade so quickly seems like a wasted opportunity or overtrading, consider that Cloud only aims to capture 80% of the trend. You can always buy, hold, and hope for the best. The Cloud helps mitigate risk by signaling reliable entry and exit signals.

There was also a 50/200EMA cross on the one hour time frame, another version of the bullish entry signal, at about the same candle as the Kumo Breakout. This can be considered confluence for a long entry.

Another trend following indicator is the Pitchfork, with an anchor drawn from the July 16th low. The median line (red) of the Pitchfork gives the expected mean of the trend. Price will continually attempt to return to this diagonal, around ~$4600.

Each diagonal of the Pitchfork can be thought of as a potential reversal zone or support/resistance line. The upper yellow diagonal zone being most overbought, or the top bounds of the trend, and lower yellow diagonal zone being most oversold, or the bottom bounds of the trend.

With SegWit approved the bitcoin network can now handle more transactions per block and therefore more transactions per day. For many, this is an important metric for understanding the value of the network as a whole. Technicals suggest at the very least a retest of all time highs, with $5000 being a likely new record very quickly.

So says crypto analyst Petar Zivkovski, and there’s evidence to suggest traders largely agree. Despite just completing perhaps its most significant technical upgrade ever, the price of bitcoin is down just under 1% over the last 24 hours of trading.

To Zivkovski, this shows that bitcoin’s upgrade, no matter how impactful, was for traders a classic “buy the rumor” event. He speculates much of the price activity in recent months was due to the upgrade prior to it being clear SegWit would be activated (thereby increasing and redefining network capacity), he notes bitcoin was trading below $2,000.

But before the network adopts the top-level payment networks and other next-generation features enabled by SegWit, Zivkovski expects a run of profit-taking.

Others are less certain here. Arthur Hayes, CEO of bitcoin derivatives exchange BitMEX, said that while the price will likely decline slightly in coming days, he expects it to “zoom higher” in the aftermath of the activation.

“My upside price target is $4,500 then $5,000,” he told CoinDesk.

Elsewhere, comments hint that traders are just beginning to understand how cryptographic assets broadly respond to issues related to their technology. Charles Hayter, founder of exchange service CryptoCompare, for instance, chose to view it as the latest data point in an ongoing experiment on the matter.

Though he said it’s likely to provide a “positive catalyst” long term, he hinted at an uncertain outlook in the coming days, remarking:

“With litecoin we saw a fall after the enaction of SegWit, but with bitcoin cash we saw a price rise on 8MB blocks being mined its half a dozen of one and half a dozen of the other for bitcoin.”

Among analysts there was also a feeling that prices could be locked into the current range until November, when another technical change is anticipated for the network.

Given the controversy around the plan, and the possibility that it could result in the creation of a third major bitcoin asset, Hayes put forward this idea, arguing that while the price could creepabove $5,000, it’s not likely to go much higher.

Elsewhere, developer and trader Jacob Eliosoff agreed that uncertainty is likely ahead as the market looks to price in those coming changes.

“I predict will be a huge mess and will do at least temporary damage to the price around the split itself,” he said.

Level bubble image via Shutterstock

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Bitcoin rose modestly on Thursday as the most prominent digital currency recovers from recent sharp declines that briefly put it into correction territory.

Moves for the cyber monetary unit come as Securities and Exchange Commission temporarily suspended trading in the shares of First Bitcoin Capital Corp. BITCF, +4.68% because of concerns about the accuracy and adequacy of public information on the Canadian company.

Still, a single bitcoin BTCUSD, +2.62% rose 2.3% to $4,287.64, advancing for a third straight day, according to Coindesk.com data, and sending its total market value to about $70 billion, according to digital-currency research site Coinmarketcap.com.

Despite recent advances, the digital currency, is still about 5% below its record set on Aug. 17, though year to date, it is up more than 300%.

Bitcoin prices have been volatile, largely due to issues surrounding the need to increase transaction sizes in the blockchain network. Traditional bitcoin participants agreed on a new protocol known as Segregated Witness, or SegWit., which they believe solves bitcoins scaling issue.

The adoption of SegWit hasnt been smooth, with a minority of users rejecting it, leading to the split of bitcoin that created Bitcoin Cash.

On Thursday, the price of Bitcoin Cash fell 1.6% to 649.32, bringing its market cap to $10.7 billion.

Ether tokens, the chief rival to bitcoin, which runs on the Ethereum network, was little changed on Thursday at $323.74. Ether on Wednesday rose 0.4% to $325, its highest level since June 23. While it remains below an all-time intraday high above $400 hit on June 12, it has more than doubled from a recent intraday low hit in mid-July. For 2017, it is up about 4,000%, bringing its market cap to $30.6 billion.

Read: This bitcoin $25,000 call is more proof of the cybercurrency bubble

The recent advances in bitcoin, along with the recovery in Ether, brought the total market capitalization of all cryprtocurrencies above $150 billion. The basket of cybercurrencies tracked by Coinmarketcap.com first broke above $100 billion in early June, meaning the space has risen by half in a little more than two months.

Meanwhile, shares of Firtst Bitcoin Capital Corp traded at $1.79 before its halt. The stock traded at $0.05 at the start of the year and gained more than 6,000% year to date.

First Bitcoin Capital Corp. is a Canadian corporation that invests in companies that mine bitcoin and operates exchanges and digital wallets, according to their website. The suspension was effective Thursday 9:30 Eastern Tim until noon Sept. 7.

In other news, A regulatory arm of Canada on Thursday signaled a warning about so-called initial coin offerings, or ICOs, which have spiked in popularity. The Canadian Securities Administrator, although acknowledging the benefits of raising funds by digital tokens, it said there are big risks.

However, they can also raise investor protection concerns, due to issues around volatility, transparency, valuation, custody and liquidity, as well as the use of unregulated cryptocurrency exchanges.Also, investors may be harmed by unethical practices or illegal schemes, and may not understand the properties of the investment products that they are purchasing, the CSA said, adding that it was monitoring developments in ICOs.

Prices of bitcoin and Bitcoin Cash rebounded on Tuesday, while ethereum remained under pressure, further retreating from recent all-time highs.

A single bitcoin BTCUSD, +0.41% was most recently up 2% on the day at $4,139.87, after dropping to as low as $3,687 in morning trade. At the session lows, the virtual currency had briefly been pushed into correction territory, defined by technical analysts as a 10% or greater fall from a recent peak in an asset.

Bitcoin hit as low as $3,687 earlier on the day, which would represent a 16.7% decline from its mid-August record close above $4,425, according to virtual-currency site Coindesk.com. At current levels it is 8% below that peak.

Even after the stumbles, bitcoins price is about 400% higher since the start of the year, with a market cap at $68.7 billion, according to digital-currency research site Coinmarketcap.com.

Meanwhile, ethereums ether token retreated, coming off a recent record, down 0.5% at $322.33 on the day. It reached a peak in mid-June at about $380 a token.

Some industry experts played down the digital-currency slide.

Naturally some of the prices and exuberance seen in the price are causing traders to take profits, said Charles Hayter, chief executive and founder of CryptoCompare.

The moves for bitcoin come as the industry has tackled so-called scaling issues, which are intended to increase transaction sizes in the blockchain network. Traditional bitcoin participants have coalesced around a new protocol known as Segregated Witness, or SegWit., which solves bitcoins scaling issue.

With SegWit implementation it has perhaps been a question of buy the rumor, sell the news, said Hayter, referring to the industrys recent trading in the wake of upgrades to the bitcoin network.

Meanwhile, bitcoins offspring Bitcoin Cash, which tumbled 14% on Monday, rebounded on Tuesday, trading 5.2% higher on the day at $662.25.

The fallout of bitcoins transaction-size problem was the creation of Bitcoin Cash.

Bitcoin Cash, the nascent alternative to bitcoin, had climbed to a recent peak of $920 on Saturday. At current prices, its market capitalization is above $11 billion, making it the third-most valuable virtual currency, behind cyberunits running on the ethereum blockchain.

Like bitcoin, ethereum went through a fissure last year that resulted in ethereum and ethereum classic, which emerged after ethereums developers engineered a controversial software update that rolled back part of its blockchain in an attempt to recover stolen funds, which led to a segment of investors refusing to adopt the update.

Ethereum and ethereum classic have coexisted the fanaticism of [Bitcoin Cash] as a fringe idea will most likely influence bitcoin, but as with most splits left of field plays, it will not reach mainstream, just like politics, said Hayter. That said, if bitcoin manages to fracture its community through infighting, there could be a chink in its armor.

So-called ethereum classic is worth only a fraction of its updated brethren, with a market value at $1.3 billion, compared with ethereum at nearly $30 billion. Ethereum appreciated nearly 70% since the start of August and is up 3,875% year to date, having started 2017 at about $8.

The total market value of an array of widely followed digital currencies was at $147.49 billion.

There ought to be a restraining order preventing the word revolutionary from getting too close to the word technology. The overwhelming number of apps, algorithms, and other inventions of code that emerge from week to week do not, in fact, transform society or even upend an industry, despite the marketing hype that often accompanies them. Nor do most wizardly machines, from Fitbits to VR helmets to Google Glass, truly alter everyday life or business practicesat least not right away. For all the heady talk of disruptionand we in the media are big on thattechnological advancement tends to be accretive, even slow.

But in this issue, a formidable trio of Fortune writersRobert Hackett, Jen Wieczner, and Jeff John Robertsdive into a technology that may well change everyday business in scores of industries: Its called blockchain.

Blockchain is the sophisticated accounting architecture that underpins Bitcoin, the cryptocurrency at the center of an investing mania of late. (As the Sept. 1, 2017 issue was going to press, the price of a single Bitcoin was around $4,200, up sevenfold from a year ago.) But as Chris Dixon, a general partner at venture capital firm Andreessen Horowitz, tells our own Mr. Hackett, the money stuffovershadows the more important technology story.

Indeed, the same distributed code-based ledger that drives Bitcoin has the potential to move any kind of data swiftly and securelyand, at the same time, make a record of that change, movement, or transaction available instantly and permanently to anyone. Thats a critical (and maybe even business-saving) advantage for companies in a host of industries, from finance to shipping to health care, as our reporting team shows.

Danish shipping giant Maersk is testing a blockchain that enables its customers to keep tabs on their cargo as it moves from port to port, while simultaneously letting Dutch customs officials and the U.S. Department of Homeland Security do the same. Walmart is testing its own trackerpotentially allowing it to identify every stop a product makes on its journey to a store shelf, which could be a game-changer in the event of, say, an outbreak of foodborne illness. (It could take mere seconds to identify whether a given package of mangoes or lettuce was at risk.)

Financial companies are testing blockchains as platforms for stock trades and interbank money transfers; diamond dealers are investigating a version to verify the provenance of precious stones; aircraft makers are exploring how a blockchain might track disparate parts of their jets as they make their way from machinist shop to tarmac. Even the state of Delaware, where the majority of Fortune 500 companies are incorporated, is experimenting with a system that may soon allow companies to register shares, undertake proxy votes, and do virtually all of their public filings via a blockchain.

The tech is hardly glitch-free, as Wieczner relates in her gripping tale of high-tech cryptocurrency heists (see The 21st-Century Bank Robbery ,). But having witnessed what the advent of digital, cloud, and mobile did to laggard companies, writes Hackett, no one wants to be the sucker left behind. There isnt a sector of the economy today, after all, where customers arent demanding faster transactions and lower costs.

Given the promise of this tech in so many industries today, its no surprise that its a magnet for brilliant young innovators. Youll find three on our 2017 40 Under 40 list, which highlights the most influential global leaders under that witching age. This years roster includes everyone from statesmen to stand-ups to startup idols.

Its a generation filled with revolutionariessome of them, even the technological kind.

A version of this article appears in the Sept. 1, 2017 issue of Fortune with the headline “New Kids on the Blockchain.”

One benefit of using bitcoin is the digital currency can be anonymousits owners can move money around the world without revealing who they are. Well, in theory at least. In reality, bitcoin is less secret than people think.

The latest reminder of this comes via a report that the Internal Revenue Service is using software to unmask bitcoin users who have failed to report profits. According to a contract unearthed by the Daily Beast , the IRS is paying a company called Chainalysis to help identify the owners of digital “wallets” that users employ to store their bitcoins.

In a letter to the IRS, the co-founder of Chainalysis says the company has information on 25 percent of all bitcoin addresses and that it deploys millions of tags to help track and identify transactions. Here is a screenshot of a paragraph from the letter:

The decision by the IRS to license the software of Chainalysis, which is based in Switzerland with an office in New York, appears to be part of the agency’s larger campaign to target digital currency users who have failed to pay tax.

As Fortune reported earlier this year, the IRS claims only 802 people declared a capital gain or loss related to bitcoin in 2015. This is significant since the price of bitcoin soared from around $13 to over $1100 between 2013 and 2015, and hundreds of thousands (like millions) of Americans bought and sold digital currency during this timein other words, there are many people who face bitcoin-related tax trouble, and the IRS is tracking some of them down.

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There are indications, though, the IRS is focusing only on the bigger fish. For instance, in the agency’s ongoing legal battle with the popular digital currency exchange, Coinbase, the IRS recently agreed to limit its request for customer records only to accounts with transactions over $20,000 .

Nonetheless, the IRS’s use of the Chainalysis software is likely to make some bitcoin owners uneasy. Meanwhile, on bitcoin forums , some users have expressed resentment against exchanges like Coinbase, Kraken, and Mt. Gox for allegedly storing wallets in such a way that analytic companies like Chainalysis or BitSeer can identify individual users.

The forum chatter also shows some bitcoin users are thinking of switching to other digital currencies like Monero that are harder to trace.

Finally, the existence of tools like Chainalysis doesn’t mean bitcoin users can’t be anonymous. Those who wish to keep their identity concealed can do so by maintaining their own wallet and avoiding exchanges that collect customer information.

This is part of Fortunes new initiative, The Ledger , a trusted news source at the intersection of tech and finance.

Mark Cuban, who owns Dallas Mavericks basketball team, speaks at the 2017 South By Southwest (SXSW) Interactive Festival in Austin, Texas, U.S., on Sunday, March 12, 2017. The billionaire recently said he is not ruling out a challenge against President Trump in 2020.Bloomberg Bloomberg via Getty Images

Billionaire investor and Bitcoin doubter Mark Cuban is coming around on cryptocurrency .

Despite saying Bitcoin was a bubble in early June, Cuban has backed venture capital firm 1confirmation, according to Bloomberg . The firm not only has plans to invest some $20 million in companies developing blockchain technologies , but it also wants to invest in early stage companies before they head into an initial coin offering (ICO)a fundraising effort in which the offering company issues tokens rather than ownership stakes.

Founded by Runa Capital principal Nick Tomaino, 1confirmation hopes an early stage investment in a promising albeit unproven company could lead to a discounted token price once young company holds an ICO, according to Bloomberg.

1confirmation also hinted that it hopes to add value to the companies it invests in to bump up its ICO pricing.

It’s not the first time Cuban has gotten involved in an ICO. Cuban also plans on participating in a fundraising round of sports-betting blockchain platform Unikrn , meaning his latest investment could result in him indirectly owning more than one kind of cryptocurrency.

Read: 5 Ways Businesses Are Already Using Blockchains

ICOs have caught fire recently , at least among investors like Cuban. One major selling point is that while traditional methods of investing in a young company usually means holding onto the stake for a long period of time, tokens are far more liquid. If an investor wants out of a company, they can usually trade the company’s coins for Bitcoin of Ether, which can in turn be traded for fiat currency, according to the Harvard Business Review .

It seems like everyone is coming up with a price forecast these days, with some of the biggest banks including Goldman Sachs Group Inc. jumping into the action, while speculators to long-time investors are also making their bets.

The consensus is that the biggest cryptocurrency will face some resistance around $4,500 to $4,800 and correct, to then continue rallying. How high? Pantera Capital Managements Paul Veradittakit, Tom Lee at Fundstrat Global Advisors and John Spallanzani at GFI Group Inc. see it going to $6,000 by year-end, while Ronnie Moas at Standpoint Research says it will keep rising to $7,500 in 2018.

Bitcoin has been on a tear this year, more than tripling in value as it crossed the $4,000 mark and touched a record $4,477 last week. Its since retreated about 7 percent from the high as investors took profit and assessed whether the rally had gone too far. Growing adoption and institutional investor interest, agreement on a mechanism to speed up transactions and regulatory steps that will help the asset broaden its reach are some of the reasons that explain the gains.

Were in a very healthy position right now, saidVeradittakit, vice president of Pantera Capital, which has invested in bitcoin since 2014. Theres a lot of interest from traders and mainstream finance on the rise of all these new crytpo currencies, but when they first get exposure into the space, theyll go into bitcoin. It has the most liquidity and biggest brand name.

Veradittakit said bitcoin will hover around current levels and rally further once the underlying technology is upgraded in November, when the block size in the bitcoin blockchain is set to double to two megabytes, increasing transaction speed. Hes also encouraged by reports from the local exchanges Pantera invests in that cross-border transactions are increasing.

Read more about the bitcoin development dispute

But the road ahead might get rocky. Goldman Sachs technical analyst Sheba Jafari wrote in a note to clients Aug. 13 that bitcoin coulderase around 40 percent of its value after reaching $4,827. On a separate note, Goldman Sachs analysts said the space is getting big enough at over $100 billion in market capitalization that it warrants watching.

Spallanzani, chief macro strategist at GFI Group, also predicts a sizeable fall to as low as $3,000 unless it manages to break the $4,500 level it tested last week. But then it should rebound and climb to as high as $10,000 in 2018, he said.

It will have to retrace a bit more before we have enough power to break through, Spallanzani said. He recommends buying bitcoin when its above $3,800 and selling when its below that level.

Not everyone is so bullish. Roy Sebag, who said he first invested in bitcoin in 2011, said he sold most of his 17,000 bitcoin between May and June because he believes the long-term value will be zero.

Its completely devolved from the original promise, said Sebag, founder and chief executive officer of Goldmoney Inc., which oversees about $2 billion of assets. Bitcoin and cryptocurrencies in general are exhibiting a mania, fueled by speculative fervor.

Amid the frenzy, some analysts have steered clear of making price predictions, while still dipping their toes in bitcoin waters.

Read more on how to get exposure to bitcoin without owning it

Tom Price, a Morgan Stanley equity strategist, said bitcoin compares to gold in that both offer similar benefits as a store of value, such as being fungible, durable, portable, divisible and scarce. Still, a lot of time and trust-building will be needed before it becomes clear whether bitcoin will also undermine demand for the metal, he said.

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Cryptocurrencies including bitcoin are still very volatile and thus not particularly safe, but that could change as their value rises and liquidity increases, wroteBank of America Merrill Lynch strategists Martin Mauro, Cheryl Rowan and Matthew Trapp earlier this month. They score well when it comes to diversification, as their correlation to equities, bonds, commodities, currencies or selected measures of risk is near zero, the strategists said.

More longer term, bitcoin will climb to$25,000 by 2022, Fundstrats Lee said, as recent regulatory approval for options trading and settlement implies a significant rise in institutional holdings of bitcoin, while he estimates user accounts are likely to rise 50 percent and usage per account to climb 30 percent.

Moas of Standpoint Research said in an Aug. 14 report that bitcoin could rise to $50,000 by 2027 as he expects cryptocurrency users will grow to as high as 100 million users from 10 million today in the next couple of years.

It looks to me as though we are at the same point in the adoption curve as we were in 1995 with the Internet, Moas wrote. Cryptocurrency is becoming more widely accepted by the day.

The bitcoin offshoot surged Saturday to a record high in high trade volume, helped by strong demand from South Korea and digital currency “miners” who found the offshoot more profitable to mine.

Bitcoin cash, an alternative version of bitcoin launched by a minority of developers on Aug. 1, climbed 44 percent to $996.92, according to CoinMarketCap. That’s the highest bitcoin cash has ever traded in its less than three weeks of history, and a jump of almost 374 percent from its low of $210.38 on its first day of trading.

Bitcoin cash traded off that high at $944.45 in mid-morning trade, still less than a quarter of the original bitcoin’s price.

Bitcoin cash seven-day performance and trade volume

Source: CoinMarketCap

After stagnating interest in the first two weeks of its existence, the bitcoin offshoot began climbing late last week after digital currency “miners” on Wednesday mined an eight megabyte bitcoin cash block. That demonstrated bitcoin cash could fulfill its promise of faster transaction speeds, which is determined by block size. The original bitcoin has a one megabyte block size and is set for an upgrade to a two megabyte block this fall.

The gains in bitcoin cash’s price and built-in protocols that gradually reduce the difficulty of mining the digital currency have made the offshoot more attractive to miners. Bitcoin cash is now 69 percent more profitable to mine than the original bitcoin, according to data analysis from Coin Dance.

Digital currency miners often switch their mining power among different currencies depending on their relative profitability.

South Korean exchanges Bithumb, Coinone and Korbit dominated trade activity, with Bithumb alone accounting for $1.7 billion of trade volume, CoinMarketCap data showed. At the overnight peak, trade in the South Korean won contributed to nearly half of bitcoin cash trade volume, according to CryptoCompare. Trade in won for the original bitcoin accounted for only 10.5 percent, the site showed.

Investors in bitcoin at the time of the Aug. 1 split into bitcoin and bitcoin cash should have received an equivalent amount of the bitcoin offshoot. However, major digital currency storage and exchange site Coinbase plans to add support by Jan 1, 2018, after initially saying it would not support the alternative digital currency.

The original bitcoin traded about 0.6 percent lower near $4,133 after hitting a record high of $4,522.13 Thursday, according to Coin Desk. Bitcoin has more than quadrupled in value this year.

Ethereum, traded 2 percent lower to $290.01, still up more than 3,000 percent this year, according to CoinDesk.

The bitcoin offshoot, bitcoin cash, soared Friday after indications the alternative digital currency could achieve its goal of speeding up transactions.

Bitcoin cash rose 40 percent from Thursday’s close of $460.53 to briefly hit $655 Friday afternoon, according to CoinMarketCap. That’s the highest since bitcoin cash touched $756.93 on Aug. 2, the day after bitcoin split into bitcoin and bitcoin cash.

However, the volatile surge was even greater when considering bitcoin cash hit an intraday low of $293 Thursday before climbing to $460.53, according to CoinMarketCap.

On Wednesday morning, bitcoin cash “miners” successfully demonstrated that the digital currency could support an eight megabyte block, versus the original bitcoin’s one megabyte. Blocks are part of the blockchain technology behind digital currencies like bitcoin that limit transaction speeds.

He added that gains in bitcoin cash’s price made it more profitable and easier for miners to mine bitcoin cash versus bitcoin, contributing to further gains in the offshoot currency’s price.

Investors in bitcoin at the time of the Aug. 1 split should have received equal amounts of bitcoin cash.

The original bitcoin traded 2 percent lower Friday near $4,220 after hitting an all-time high of $4,522.13 Thursday, according to CoinDesk. At Friday’s prices, bitcoin had a market value of about $70 billion and remained more than four times higher for the year.

Another digital currency, ethereum, traded 3 percent lower near $292, according to CoinDesk. Ethereum has the second-largest market capitalization among cryptocurrencies at $28 billion, according to CoinMarketCap.

With Friday’s gains, bitcoin cash ranked third by market value at around $10 billion, according to CoinMarketCap.